Glebe Borough v Lukey (Australian Gaslight Co) [1904] HCA 8; (1904) 1 CLR 158 (21 March 1904)

HIGH COURT OF AUSTRALIA

Borough of Glebe Plaintiffs, Appellants; and Lukey (Australian Gaslight Co.) Defendant, Respondent.

H C of A

On appeal from the Supreme Court of New South Wales.

21 March 1904

Griffith, C.J., Barton and O'Connor, JJ.

Gordon K.C. (Harvey with him), for the appellants.

Wisc, K.C., A.G. for N.S.W. (with him Knox and J. L. Campbell) for respondents.

Knox followed.

J. L. Campbell followed.

Gordon, K.C., in reply.

Judgment was delivered by

21st March

Griffith, C.J.

This appeal raises a question of great interest and importance to all municipalities in New South Wales as well as to all gas companies, water companies and others carrying on a business which requires the use of the streets and roads of municipalities for the purpose of laying their mains. The action was brought by the borough to recover rates claimed to be due from the defendant company in respect of their gas mains laid down in the streets of the borough. The question of the liability of the company to be rated depends entirely upon the terms of the Municipalities Act of 1897, clause 137 of which defines rateable property thus:—"All lands, houses, warehouses, counting houses, shops, and other buildings, tenements, or hereditaments within any municipality shall be rateable property within the meaning and for all the purposes of this Act, save as it is next hereinafter excepted," and then enumerates certain exceptions within which the property in question is not included. Under that section the first question which arises is whether that portion of the soil occupied in this way by a gaslight or any similar company, for the purpose of carrying its mains, is "land" within the meaning of the definition, and the second question is whether, if it is primâ facie "land" within the meaning of that definition, there are other provisions in the Act which require a more limited construction. Before the Supreme Court the latter question only was considered, because the Court had previously held, in an action brought by the Sydney City Corporation against the defendant company, that the defendant company's mains came within similar words in the Sydney Corporation Act. The Supreme Court therefore addressed itself only to the question whether there were other provisions in the Municipalities Act that required a more limited construction to be put upon sec. 137. Before this Court, however, both questions were raised, and it is necessary for us to deal with both, because we are not bound by the decision of the New South Wales Court. As was pointed out by the Court in the Sydney Corporation Case, it is settled law in England that, under Statutes by which the occupiers of land are liable to be rated, the portions of the soil occupied by a gas, water, or tramway company are "land" within the meaning of the Statutes, and that companies carrying on their business by means of these "lands" are "occupiers" within the meaning of the same Statutes. In the Sydney Corporation Case an endeavour was made on behalf of the company to distinguish these authorities from the case then before the Court by suggesting that the company's occupation was somewhat different in that it was in the nature of an easement, and not land within the meaning of the Statute, and that the defendants, therefore, could not be said to be "occupiers" within the meaning of the Statute. To establish this, reliance was placed upon the case Chelsea Waterworks Co. v. Bowley, reported in 17 Q.B., 358, but, as was pointed out by Herschel, L.C., in Metropolitan Railway Co. v. Fowler, (1893) A.C., 416, that case turned upon the words of the Land Tax Act, and it was held by the Court that under that particular Act there was no intention to charge persons whose occupation was of such a kind as that of a waterworks company. He pointed out, however, that it was very difficult to reconcile that case with another case decided in the same year by the House of Lords, The King v. East London Waterworks Co., 18 Q.B., 705, in which it was held, with regard to a tunnel occupied by a railway company, that so much of the soil as was occupied by the tunnel was land within the meaning of the rating Act. The same has been held by the Privy Council to be the law in Victoria under a definition in almost the same words as are in the Sydney Act; Melbourne Tramway Company v. Fitzroy, (1901) A.C., 153. Lord Hobhouse, in delivering the judgment of their Lordships, at p. 167, quoted the Victorian Statute, "All land shall be rateable property within the meaning of this Act, and of the Acts relating to the incorporation of the City of Melbourne, and town of Geelong, save as is hereinafter excepted," &c. There were certain other provisions in connection with the tramway to which His Lordship referred, and at p. 169 he went on to say: "But their Lordships do not find in these provisions any indication of a departure from the principles of municipal rating established alike in England and Victoria. The use of the tramway is the occupation of the tramway. The position of the Pimlico Tramway Co., L.R., 9 Q.B., 9, resembles that of the present appellant. The enactments defining the position of the two companies are almost identical. The Pimlico Company was held to be an occupier, rateable as such, and not the less so because its occupation was restricted to a particular purpose, nor because the public also had rights over the same ground. Their Lordships agree with the Supreme Court that this company is subject to ordinary municipal rates." It may therefore be taken to be settled law in England and in Victoria that such companies are liable for ordinary municipal rates in respect of their occupation of that part of the soil under the streets. The arguments addressed to the Full Court on behalf of the defendant in the case of the Municipal Council of Sydney v. Australian Gaslight Company were not accepted. In my opinion it is the law in this State that companies of this kind are liable to pay ordinary municipal rates in respect of this sort of occupation unless there is to be found something in the Statutes specially exempting them. This is also the settled law in Queensland under precisely similar Statutes. I turn now to the question whether there is anything in the Municipalities Act requiring that a different interpretation be put upon sec. 137. On this question there were two main lines of argument; first it was contended that see. 131 contained no provision for assessing such land, and secondly it was sought to raise a distinction between this and the English cases on the ground that under this section certain notices had to be served upon the occupiers of the property, and that the defendants were not occupiers upon whom such a notice could be conveniently served. It was also urged that the rate was a charge upon the land, and so was on a different footing from the poor rates in England. But as the English cases turned only on two questions, whether land so occupied was land within the meaning of the Act, and whether the person sought to be rated was an occupier, it would seem that this point about service of notice upon the company is immaterial. If it is land, and the person sued is an occupier, then the provisions requiring the occupier to pay become applicable and the liability is absolute. I can see no difficulty in applying a section providing that notice be served upon the occupier in this case any more than in the case of the Municipal Council against the Gas Company.

There remains the question whether the assessment clause in sec. 141 renders it necessary that a different interpretation be put upon the words in sec. 137. Sec. 138 in Division II. of Part X. makes provision for the valuation of all rateable property. Then follow two sections giving details as to the method of making this valuation. Then in Division III., sec. 141, there is a requirement that the council of each municipality shall make an estimate of the probable expenditure and the probable revenue for the current year, and then that they shall raise the amount required "by an assessment and rate upon all rateable property within such municipality." I pause here to note the word "all." Then follow the words which have given rise to the difficulty in the Court below, "assessing the same at nine-tenths of the fair average annual rental of all buildings and cultivated land or lands which are or have been let for pastoral, mining, or other purposes, whether such buildings or lands are then occupied or not, and at the rate of five pounds per centum upon the capital value of the fee-simple of all unimproved lands, such average rental and capital value of all such rateable property to be estimated by valuers as is hereinbefore provided." The learned Acting Chief Justice, at p. 701, puts the difficulty thus—"It seems to me that we may take the view either that this section limits the term rateable property in sec. 137 to the property mentioned in sec. 141, or that it is rateable property, but not liable to assessment. In fact we are not asked in terms whether the property is rateable, but whether the defendant company are liable to pay the rates." And Mr. Justice Owen, at p. 703, thus:—"But the difficulty arises under sec. 141, which provides for assessment. That section enacts that the council of the borough, after making an estimate of the probable expenses, &c., shall raise the amount so estimated by an assessment and rate upon all rateable property within such municipality." Here the learned Judge quotes that part of the section providing the method of assessment, and then proceeds—"I cannot see how gas mains laid under the surface of roads and streets can come under the words buildings and cultivated lands, or lands which are or have been let for pastoral, mining or other purposes, or how roads and streets occupied by gas mains can be described as unimproved lands. In my opinion gas mains laid under the surface of a road or street of a municipality do not come within either of the categories of rateable property which can be assessed. If that is so, then the words in sec. 137, lands, tenements and hereditaments must have a meaning limited by the power to assess in sec. 141, and must be held to be such lands, tenements and hereditaments as are referred to in sec. 141."

In construing Statutes the first duty of the Court is to ascertain, if possible, the intention of the legislature. Now in this Act the legislature has expressed three times in forcible language its intention that all rateable property shall be valued and rated. Sec. 138 says—"The council of each municipality shall cause a valuation to be made in each year of all rateable property within such municipality by two competent persons to be styled valuers." Sec. 141 provides that the assessment and rate shall be made upon "all rateable property within such municipality," and towards the end of the main part of the section the same words "all such rateable property" are again repeated in the provision for the estimation of the value. That being the expressed intention of the legislature, it is the duty of this Court to construe the remaining words of the section in such a way as to give effect to that intention, if the words used are fairly capable of being so construed. On this subject I refer to what may be regarded as perhaps the oldest and the latest statement of the rule to be followed in such cases. I quote first that made by Sir B. Shower, in a.d. 1688, as set out on p. 117 of Hardcastle on Statutory Law, 3rd ed.: "It is a known rule in the interpretation of Statutes, that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may be all made useful and pertinent." The word "all" used in the Act now before us, must therefore not be made "superfluous, void, or insignificant" if it is possible to avoid making it so. In the case of Salmon v. Duncombe, before the Privy Council in 1886, reported in 11 A.C., 627. Lord Hobhouse, in delivering the judgment of the Committee, of which Lord Watson was a member, said (p. 634):—"It is, however, a very serious matter to hold that, where the intention of a Statute is clear, it shall be reduced to a nullity by the draftsman's unskilfulness or ignorance of law. It may be necessary for a Court of Justice to come to such a conclusion, but their Lordships hold that nothing can justify it except necessity or the absolute intractability of the language used. And they have set themselves to consider—first, whether any substantial doubt can be suggested as to the main object of the legislature; and, secondly, whether the last nine words of sec. 1 are so cogent and so limit the rest of the Statute as to nullify its effect either entirely or in a very important particular." Taking then into consideration this principle, that all the words used are to have a meaning given to them that is consistent with the intention of the legislature, and having regard to the words used here in particular, I confess that I do not feel very much difficulty. It is clear to my mind that the legislature thought, as the draftsman thought, that they had divided all property into two classes, one class to be valued by taking its fair average annual rental, and another class, comprising all land as to which this would not be a fair basis of valuation, to be valued by taking the capital value of the fee simple as the basis. It is said by the defendants that the property sought to be rated in this case does not fall within either of these classes. The first part of the clause describes one class as consisting of "all buildings and cultivated lands, or lands which are or have been let for pastoral, mining, or other purposes, whether such buildings or lands are then occupied or not," and the other class as "all unimproved lands." The section is, no doubt, inartistically drawn. The word "buildings" must be taken to include the curtilage as well, although, literally, it means only the actual structure, and, consequently, there is no express provision at all for rating anything but the actual structure, although only a part of the land is built upon. It is plain that the legislature thought that the test of rateability should be whether the land was, or was not, in such a condition as to be likely to produce revenue, and enumerated what it regarded as improvements. All other lands were regarded as unimproved. Improvements were taken to be buildings or cultivation or mining operations, and if there were none of these, the land was regarded as unimproved. These two classes were intended to be exhaustive and to comprise, between them, all lands. That being the intention of the legislature, I look at the subject-matter of this case, and I see no difficulty in regarding it as unimproved land. The argument was somewhat obscured by sometimes regarding the subject-matter as the hollow space within the pipes, and sometimes as the surface above them. Traces of this mistake are apparent in the arguments of counsel for the defendants here, and in the judgment of the Court below. But in considering the subject-matter as it really is, it may be worth while to refer again to an illustration which I put during the argument. In Western Australia there is a pipe line 350 miles in length, laid to convey water to Kalgoorlie. The pipes are laid upon the surface of the soil, and are covered throughout their length by a mound of earth two or three feet in thickness. Can it be contended that the owners of these pipes are not in occupation of a strip of land 350 miles in length by some 5 or 6 feet in width? As was pointed out in the case Pimlico, &c., Tramway Co. v. Greenwich Union, and by the Privy Council in the case of the Melbourne Tramway, &c., Co. v. Fitzroy, (1901) A.C. 153, it makes no difference whether it is the surface or land a foot or two below the surface that is occupied. There can therefore be no difficulty in regarding the land on which the pipes lie and on which they rest as being occupied, though there may be some apparent but not real difficulty in regarding the space inside the pipes as occupied land. In the Kalgoorlie instance it is clearly the surface, and the land underneath it, that is occupied. That being so, what difficulty is there in regarding the land so occupied as unimproved land? There may be some difficulty about regarding it as "let" land. But if it comes within either class it is liable to be rated. It is therefore not necessary to decide to which class the land belongs, though I am inclined to think it is within the second. We have been told that we must answer this question in order to decide which is the proper method of rating this class of property. We are not, however, obliged to answer it, and therefore, as the question only arises incidentally, and as it is not necessary for the purposes of our decision, we decline to answer it. Sec. 150 provides that "If any person thinks himself aggrieved by the value at which his property has been assessed for any year, he may" ... "appeal against such assessment to two or more justices in petty sessions" ... "and such justices shall have power to hear and determine the same, and to award such relief in the premises as the justice of the case may require, and such decision shall be final as regards the matter of such appeal, and the rate-book," ... "shall if necessary be amended in accordance with such decision." The present defendants appealed against the assessment in question, not upon the ground of its having been made on a wrong basis, but on the ground that they were not liable to be rated at all in respect of the particular property in respect of which the assessment was made. The Supreme Court in Knight v. Municipality of Rockdale, reported in 20 N.S.W.L.R. (Eq.), at p. 33, held that the decision of the justices was final, not only as to the value, but also as to the basis of assessment. We are invited by counsel for the defendants to over-rule that decision, and to follow the case Borough of North Sydney v. Milson, 15 N.S.W.L.R., 55. I content myself with saying that having carefully considered the reasoning in the judgments of A. H. Simpson, C.J. in Eq., and of the Full Court in Knight v. Municipality of Rockdale, it entirely commends itself to me. It is, therefore, immaterial for the purpose of our decision whether the basis of the assessment was the true one or not. I may remark, however, though it is not necessary to this judgment, that I see very little difference between an assessment based upon the rental value and one based upon the capital value. If the rental value is the basis, it is to be taken as the rent that a hypothetical tenant would be willing to pay; if the capital value is the basis, then, following the rule laid down by the Court of Queensland, it is to be taken as what a hypothetical purchaser would give for the property, and that amount would, I suppose, be estimated on consideration of the return that such land would be likely to bring to its owner in the shape of rent.

For these reasons I think that the property of the defendant clearly falls within the definition of rateable property, in the Municipalities Act, and that there is nothing in sec. 141 conferring exemption upon it or cutting down the effect of the previous sections. I hold, therefore, that the property is rateable, and that judgment should have been entered for the plaintiff for £2,700, the amount agreed by the special case.

Barton, J.,

concurred.

O'Connor, J.

I am of the same opinion. I would like to add a few words as to the construction to be put upon sec. 141. It would be quite impossible to construe it in such a way as to carry out the intention of the framers of the Act that all rateable property should be assessed, if the restricted meaning contended for is given to the words "unimproved lands." It appears to me that it was contemplated that whatever was rateable property should be included in the two classes mentioned, and there is only one way of reading the Act so as to include them. I may refer again to an illustration which was used during the course of the case. Take the case of a paddock within a municipality. It has been cleared, with wells sunk and dams built upon it, with the result that the owner is able to occupy it very profitably. If we take the narrow meaning placed upon the word, that is not "unimproved" land. It has no buildings upon it, and is not cultivated land. Therefore, unless it comes within the class "unimproved land" it is not rateable. To hold that there is an omission of this class of land would mean the loss of a very large amount of revenue to municipalities. Such a case must have been within the contemplation of the Legislature, and it could not have been intended that a very large quantity of valuable lands of this kind should be exempt from municipal taxation if within the boundaries of a municipality. Apparently there are only two kinds of improvement to land contemplated by sec. 141—by buildings and by cultivation. If the narrow interpretation of "unimproved lands" is to be adopted, all lands improved in other ways would be free from rates—a result which is inconsistent with sec. 137. To give effect to the Act as a whole some more extended meaning must be attached to the word "unimproved" as used in the section. The natural and obvious meaning of "unimproved lands" in that section is "lands not improved by building or by cultivation." The only kinds of land that are to be classed as improved lands are those improved as specified in the first part, and all others are to be regarded as "unimproved." That seems to me to be the proper construction to put upon the section, and that construction brings this class of lands under it and makes it rateable property. I express no opinion on the question whether the word "let" covers a case of this kind. That has not been fully argued before us, but I am disposed to think that it would not. It appears to me that if this is rateable property we are precluded from inquiring whether it has been placed in the proper class or not. On that point we are concluded by the decision of the magistrate. I concur in the opinion of the Chief Justice as to the decision in the case Knight v. Municipality of Rockdale. I think that the magistrate's decision is final.

Appeal allowed. Judgment of the Supreme Court reversed; the first question in the special case answered in the affirmative, and judgment entered for the plaintiffs for £2,700 with costs of the action: The respondent to pay the costs of appeal: The amount of security deposited to be returned.

Attorney for the appellants, J. W. S. Lucas.

Attorneys for the respondents, Allen, Allen & Hemsley.